I would even hazard a statement, which is that I believe China may be more meritocratic today than America is. Given this system, given the way in which education and scholastic intelligence are lionized, I would say that China today is probably more meritocratic than the US.
Welcome to China Decode. I'm Alice Han.
I'm James Kynge. In today's episode of China Decode, we're discussing digging inside China's genius pipeline, Trump accusing China of secret nuclear testing, plus the revival of China's underground club scene and Bad Bunny topping the charts in China. That's all coming up. But first, let's do a quick check-in with how the Chinese markets are starting the week. On Monday, the Shanghai Composite index and the Hang Seng index closed up 1.4% and 1.8% respectively as investors shift back to risk-on mode after last week's sell-off. PopMart, the company behind the Labubu, rallied about 6% on news of strong growth expectations and expansion overseas, and tech giants Alibaba and Tencent both closed up over 2%. How are you feeling, James? I know it sucks to be sick.
Kind of getting there. Sorry about this. And my voice is not great, but...
Well, you still got the voice for radio.
All right, let's get right into it. There's been a viral narrative floating around about China running some shadowy, all-powerful genius factory, but the reality is both less conspiratorial and way more interesting. China isn't mass-producing prodigies. It's running a small, brutally selective pipeline that spots extreme talent early and pushes it fast. And a surprising number of the people behind China's biggest tech and AI companies and breakthroughs came through these genius programs. James, you've lived in China for many years. I'm sure you've met people who have been in these genius camps that can tell us a little bit about what it was like on the ground.
Yeah, I have actually, Alice. I've known some kids who are in these genius camps. You know, this is one of these stories that people who've lived in China know very well, and people outside China find really fascinating for very good reasons. I think this is so different from what people might imagine happens in a country that is governed by a party that calls itself communist but is in fact anything but egalitarian. This is, as you said, Alice, this is brutally competitive. It is the very antithesis of egalitarianism. What happens in this process is that the authorities skim off the very brightest kids and then they put them in a class with other super bright kids and then they skim that cohort again until at the end of this process you end up with a few classes in the very best universities full of truly genius-level talent. And these genius-level talents, as you've said, Alice, they all—well, most of them anyway—go on to lead some of China's extraordinary technological advances. And I think this program says a lot about what China is all about. It says a lot about what China prioritizes, what drives its people, what society's all about, and it reveals a crucial motivator of China's extraordinary success. Just to go back to my personal story, when I lived in Beijing, we had a family friend and she lived in what's called the hutong area of Beijing. Those are the old alleyways that sort of cluster around the Forbidden City in the center of Beijing. And families live kind of cheek by jowl. It's not a wealthy area. These were not wealthy people. But the son of our family friend, he was a truly clever boy. And at the age of 11, he was skimmed off to go into one of these genius classes. And what I remember so particularly is the fact that everybody on his street—I'm talking hundreds and hundreds of people—knew this news. And every time he walked down the street to go home and have his tea, you know, dressed up with his little red tie around his neck, he would get applauded and mothers would pop out of their homes and give him a little dumpling or some other little bit of food to eat because everybody in China admires a clever kid. What do you think about this system of skimming off clever kids?
Well, I love the way that you've described that story and to some extent I think a lot of Western countries could benefit from that. It seems like we're facing a culture of anti-intellectualism. I don't think that kind of kid would be given a dumpling in, say, America. I personally didn't grow up in China and my cousins, none of them got into these genius classes, but I know friends of friends who did. And what's interesting to me is that it's not just isolated to STEM students. So humanities students can also get into these genius programs. And the reason why I think this is so interesting is because if you look at the founders of the big tech companies, a vast majority of them came from these genius schools. The founder of ByteDance, the founders and leaders of Taobao and Pinduoduo, China's biggest e-commerce platforms, the founder of Biren, the Chinese chip maker, Cambricon, its founders also both went to genius schools, and engineers behind DeepSeek and Alibaba's Qwen AI models. I read a great think piece over the weekend in the FT where you formerly worked, James, and the author who wrote this piece ends up revealing towards the end of the article that she also went to one of these genius schools. But she describes how even humanities students worked more recently in AI companies like DeepSeek to help with their models because a lot of what these models have to deal with is real human intelligence and that's just not isolated to STEM. But it was fascinating to me doing research on this because I hadn't lived it personally, but I can see how it's having a real impact on generating talent at the top levels of China's tech companies, of China's corporates. And it's something that I think has really floated under the radar. And it's been around for decades. That's the other thing. It's not an overnight thing. It's been around for decades, I believe, since the 80s. So this has been a concerted effort by the government to try to find talented individuals across all of the provinces in China. It reminds me a little bit of the imperial Chinese system which was very much to try to find these scholar gentlemen in all the different far-flung provinces, bring them back to Beijing so that they could become basically ministers within the court of the Chinese emperor. But in this case, you know, in the modern-day scenario, these highly talented individuals then go out and proliferate and make companies and lead major tech firms. So it's been really interesting. One last thing that I will say is there apparently is a special class known as the Yao class. Yao is Andrew Yao, who is the sole winner of the Turing Award, which is basically the equivalent of the Nobel Prize in CS. He a couple of decades ago moved from the States back to China where he originally was from and he's really become the champion intellect and professor of AI in China. So apparently there is a class named after him at Tsinghua called the Yao class where the chief AI scientist at Tencent was one of his students, the founder of Moonshot, which has produced Kimi, and the founder of Pony AI, as well as a real range of these Chinese tech founders. So again, I think the story is so fascinating because it shows both the government having a hand in plucking out these highly talented individuals, but also then these individuals going out from the bottom up and making their own companies which are really driving China's innovation.
Yes, absolutely. Alice, you mentioned I think that there's about 100,000 of these students that are selected every year to go into these genius class streams. Those students sort of find themselves somewhere in the system later on. One of the things that I hadn't realized about this until I read the article in the Financial Times that you mentioned by Jing Wu was that if you get selected, you get to skip the Chinese high school exam called Gaokao. And there is no more dreaded a word I think in the Chinese language than Gaokao because it is this absolute solid year of stress for any student who wants to graduate from high school. The competition is so intense that you know you hear every year you hear about students having nervous breakdowns. You know, families that have kids that are about to do Gaokao are in major, major sort of protective mode. It's interesting to think about the dynamics of this because if you get to skip doing the Gaokao, then you can focus more on the subjects that you're interested in. You don't have to do the Gaokao syllabus. So you can just focus on, let's say, if math is your thing or computer science is your thing, you can specialize in that area and that allows you to make greater progress towards the genius stream and to, you know, come up with the breakthroughs that you've just been mentioning, Alice. The other thing I think is instructive is that talking 100,000 students that are selected for these genius streams, there are every year about 13, nearly 13 and a half million Chinese students that take Gaokao. So you can already see what a tiny proportion of students are being skimmed to go into these genius streams. That really is a tiny, tiny proportion of the very brightest kids in the country. And the last thing I'd say, Alice, is that yes, this resonated with me so much having read quite a lot of Chinese classical literature. The way in which Chinese culture lionizes bright kids, especially poor bright kids, is truly amazing. There are so many stories that go back thousands of years in fact to like a particular boy whose parents were so poor who would read by the moonlight that was reflected off the snow again because his family couldn't afford candles. So there is this incredible ancient culture of studying despite adversity and getting ahead using the education ladder to correct for society's injustices and somehow to rise to the top in spite of fate as belonging to an impoverished family. So there's a real big amount of mythology around all of this stuff that makes this such a poignant story for me. I would even hazard a statement which is that I believe China may be more meritocratic today than America is. Given this system, given the way in which education and scholastic intelligence are lionized, I would say that China today is probably more meritocratic than the US. And one last point about the Gaokao, which you rightly mentioned, James, is that it's a system that's predicated on your score during the exam. It's unlike any other I think exam in the world. Certainly unlike the Australian exam system I went through or even the American system I went through as well where in those models you have a hybridized scoring of your exam scores, your essays, your extracurricular activities. In the Chinese scenario, it really comes down to what score you get on the day of the exams. And it's also true, I think, Alice, that every Chinese person knows their Gaokao score and remembers it forevermore. I mean, even 20 years after the event, if you ask them what was your Gaokao score, they can tell you immediately.
Yeah. It's emblazoned on their memory, either as a badge or as a scar. We'll be back with more after a quick break. Stay with us.
Welcome back. Big news on the nuclear front. The US is accusing China of secretly testing a nuclear weapon back in 2020. The accusation comes just as the last remaining US-Russia arms control treaty is expiring. With Trump pushing for a broader deal that would include both China and Russia, the global nuclear landscape is suddenly shifting very, very quickly. James, how credible are these claims that China has been secretly testing nuclear weapons? Apparently, according to the Comprehensive Nuclear-Test-Ban Treaty Organization, they haven't found or detected any such nuclear weapons tests, but according to the US administration, they've been doing this. So what's your take on it?
Well, I mean, it's really tough for somebody like me to know, but I would say, I mean, look at the nature of the official that has made this announcement. Thomas D'Agostino, he is US Under Secretary of State for Arms Control and International Security, and he made these assertions at the United Nations Disarmament Conference in Geneva. So the first thing to say is that this is the right person in the US administration to be making these comments and he made them at a very serious forum. And it was in the nature of an announcement. He said, 'I can reveal that the US government is aware that China has conducted nuclear explosive tests, including preparing for tests with designated yields in the hundreds of tons.' And he added that the Chinese military sought to conceal the testing by obfuscating the nuclear explosions because it recognized that these tests violate test-ban commitments. So, you know, the plain truth is that I have no idea, but it does seem to me that we've got a very serious US official saying this and also saying that China has tried to obfuscate it, maybe muffle the shock waves that come out from a test like this. It would probably be likely that some kind of a test by China has taken place. But I also think there's an interesting question here as to whether or not China did anything wrong because we need to look carefully at what treaties China has signed up to. It has signed the Comprehensive Nuclear-Test-Ban Treaty and it has not ratified it, which means that, you know, it didn't break any of the precepts of that treaty because it hasn't ratified that treaty. If you look at the Nuclear Non-Proliferation Treaty, which China has signed and ratified, then that treaty actually does not prohibit tests. It discourages them, but it doesn't prohibit them. So I think there's an interesting question here. My guess would be that this US official is speaking from a position of having some evidence. We all know that the US monitors Chinese territory very, very carefully with all kinds of spy satellites that cover probably every inch of the testing area. The second point is that China hasn't actually done anything wrong according to the treaties that it has signed. At least that's my take on it. Alice, what are you seeing?
